NUMSA Rejects the VAT Increase

The National Union of Metalworkers of South Africa (NUMSA) appeared before Parliaments Standing and Select Committees on Finance on Wednesday to make submissions on the 2018 Fiscal Framework and Revenue Proposals (2018 Budget). NUMSA represents over 360 thousand Metalworkers and we took the opportunity on behalf of our members and their families to reject the proposal for a VAT increase and an increase in the fuel levy and road fund levy as well, because it is an attack on the working class and the poor.

WHAT THE FISCAL FRAMEWORK MEANS IN REAL TERMS

All the proposed increases are coming at a time when working class families are still trying to cope with the unacceptable 5% increase in Eskom tariffs. The progressive social grant increase of the Old Age Grant by R90 in April and R10 in October will do very little to cover the harm that would be caused by the hike in VAT. Similarly with the Child support grant increase of R400 (April) and R410 (October). Furthermore we cannot continue to celebrate the fact that about 11 million people are on social grants. This simply shows that this government has dismally failed to transform the lives of the poor.

The proposals demonstrate that the state cares more about protecting white wealth and the interests of White Monopoly Capital, than protecting the poor and the working class. In South Africa 5% of the population owns 95% of the wealth of the country. The foundations of the racist and colonial South African economy remain intact.

The table below clearly shows that if the proposals on a VAT increase were to be passed, then nearly a trillion rand of the tax burden will come from the working class, while White Monopoly Capital will be exempt!

TAX REVENUE 2018/19

The fuel levy and Road fund levy increases will affect not only those travelling by car or taxi. These levy increases will affect the cost structure of transport and logistical companies that are delivering food, clothes, appliances and other goods. Hence, these items might also experience a spike in prices, and subsequently, working class consumers will be negatively affected.

For more than two decades the governing party has pursued a diligent, effective and ruthless attack on working class families by promoting disastrous neoliberal capitalist policies, which have consistently failed to address the triple crisis of unemployment, poverty and inequality.

They commercialized the roads through e-tolls; they regulated labour brokers instead of banning them; and now they are trying to change the law to limit the right to strike, while legalizing slave wages though the proposed National Minimum Wage Bill.

The neoliberal materialist culture of grotesque inequalities, conspicuous consumption and corruption is continuing unabated, in the post Zuma presidency. NUMSA maintains that only a Socialist state, led by the working class can drive an agenda to nationalize the commanding heights of the economy in the interests of the working class majority.